The numbers so far this week...

Don't look for any changes in prices this week, that's if the markets still show "steady as she goes" in tomorrow's trading...

A shaky economic recovery added some downwards pressure and then the debt deal in the US added an up side, negating any possible decreases, let alone increases, to consumers this week so far.

Here's what I have for the price changes this Thursday, with one more day to go:

• Heating and stove oils show down by 19/100ths of a cent.
• Diesel shows down by 6/10ths, and...
• Gasoline shows an even zero to come.

I'll be back tomorrow night with a full breakdown.

Shortages in Nova Scotia

In the meantime, a shortage of regular gasoline in Nova Scotia has some wondering what's happening with prices this week.

The short answer is "nothing so far".

Gasoline prices there are measured the same way as they are here, by NYMEX pricing, and those numbers show no change, like I said. It's a good case for having regulation of fuel prices, to prevent any binge pricing from entering the markets.

The shortage of gasoline is caused by a refinery outage by an Ultramar refinery that was shut down earlier than anticipated by a lightning storm. Power outages, or hits, could cause a refinery to have to take up to a week to restart, but a planned maintenance outage played into the plans as well, and all before supplies could be purchased from elsewhere.
See the CBC story on the shortages here or see it at www.cbc.ca/ns

Ultramar is trying to top up supplies via a New Brunswick refinery through a 'reciprocal sales agreement, a type of agreement that our group considers contrary to the rules of free and open competition. In essence, refineries choose to close up refineries and share from other company's supplies, negating competition between companies.

When the Competition Bureau allowed an agreement we contested in 1998, they told us it was too late to stop it, and the arrangement between companies was allowed to continue.

Just another reason for a new Competition Act and a Bureau that won't be afraid to intervene on the behalf of consumers in this country...

That's it for now!

See you tomorrow evening!

George

Gasoline prices to remain steady-Heating and stove oils to drop

Media release

Conception Bay South, NL, July 15, 2008- Consumers of gasoline in Newfoundland and Labrador shouldn’t see much change in gasoline prices this week when the Petroleum Pricing Office sets prices again, that’s according to George Murphy of the Consumer Group for Fair Gas Prices.

What the numbers say
“From the looks of things, gasoline prices may show no change according to the first twelve days of data and today’s market activities. Right now, those numbers are showing almost a ‘break even’ scenario. The numbers are slightly different on the heating oil front. Numbers there are showing an almost 1.5 cent a litre decline and that doesn’t include the market sell-off of distillates we’re witnessing right now. Heating and stove oils may drop more than what we have on paper right now,” said Murphy.

“I would expect the heating oil numbers to be the same for stove oils and that should also reflect a very modest decline in diesel prices. How long will the slight retreat in pricing last would be anyone’s guess at this juncture. We already see a possible winter record for heating and stove oil pricing barring any economic collapse and drop in distillate demand. Today the markets are reflecting the stark reality that we’ve seen all along; that consumers are hurting because of high petroleum pricing. Now that various economies failed to react to the rising costs of oil, we’re seeing deeper economic impact and the likelihood of recession. Because of that, there’s a drop in pricing today because of the fears of a drop in petroleum demand. What traders have sown, the economy can reap.

Not out of the woods yet
“Waiting in the wings are other possible factors that could increase pricing again. We are, of course, into Hurricane Syndrome season and that means possible plays in the markets that reflect possible supply disruptions or disruptions to imports. We remember well Katrina and Rita in September ’05. Venezuela also is promising to cut off supply of crude oil to the United States if Exxon Mobil is successful in freezing the assets of the national-owned Petroleos de Venezuela’s overseas assets. Other geo-political factors remain in play such as the ongoing disruptions in Nigeria, OPEC talk of possible production cuts in the face of a drop in world demand and, of course, consumer demand factors.

Last independent retailer to be sold?
There is some concern over the rumored sale of Tibb’s Oil in the immediate St. John’s heating oil market. I have received a couple of calls this week expressing the consumers concern over the possible sale of the area’s last independent retailer and the effect on the heating oil market if there are no independents left. This should be a concern to most after the recent sale of Forward’s Oil to Harvey’s Oil this past April. If wee see the sale of Tibb’s Oil to some other company, we will have seen the removal of the last independent heating oil retailers from the St. John’s market and that means some possible trouble to consumers of the product. I believe that there will be an adverse affect on the retail heating market in the area and that may lead to one company having a more than obvious dominant market position let alone the removal of competition in the market.
I think that, if the rumors were found to be true, then the Competition Bureau should be made to look at the situation and prevent the sale of the company to just that one retailer. It’s here that we need to stand on guard to protect consumers from any dominant market scenario. The problem here is that high heating oil prices themselves have become a factor in the independents demise. A lower sales volume because of an increasing price may well have been a factor in the sale, if it is true. I’m still trying to dig into this one.”

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For more information, contact;

George Murphy
Group researcher/Member
Consumer Group for Fair Gas Prices
gasprices@hotmail.com